Federal Reserve Chairman Jerome Powell doubled down on his remarks that the economy as we know it is over during a virtual appearance Tuesday at the Bay Area Council Business Hall of Fame Awards Ceremony.
“We’re not going back to the same economy, we’re going back to a different economy,” Powell said, echoing comments he made at the European Central Bank’s Forum on Central Banking last week.
The pandemic has accelerated ongoing trends, including the increasing use of technology, automation and telework, Powell said last Thursday. And while these changes will be beneficial for some, they will hurt certain groups in the short-term.
On Tuesday, Powell also reiterated that people in lower-income jobs hadn’t recovered as much as others and that workers in the services industry might need more help going forward.
“The recovery is incomplete,” he said, warning of near-term risks surrounding the resurgence of Covid-19 infections. “We have a long way to go.”
The central banker has repeatedly said that more fiscal and monetary stimulus was likely needed to help with the recovery. The Fed slashed interest rates to near zero in March and launched a series of lending programs to support the recovery since the crisis started.
Meanwhile, Powell said it wasn’t the right time to worry about the fiscal health of the United States, even as the government is spending trillions to help boost the economy. Rather, that issue should be addressed when unemployment is low again and tax revenues are rolling in.
“That’s the time to really focus,” he said.